Ensuring your business can deal with all eventualities has always been good practice. In today’s IT-dependent world, protecting against all risks is getting ever more challenging. One area of IT consulting in Milwaukee that often gets forgotten is Cyber Liability Insurance Cover (CLIC).
Even though cyber insurance has been around since the 1990s, the market remains small, with a surprising number of companies not even knowing this valuable option exists. This is set to change, however, as the focus on corporate liability from cyber breaches intensifies. The global market for cyber insurance is set to reach $14 billion by 2022.
What is CLIC?
Cyber insurance is a form of insurance against the risks from internet and information technology. Cyber liability insurance covers the policyholder against the losses arising from breaches of data-protection laws and the liability that arises from the handling of data.
CLIC can also cover associated costs, such as spending on PR activities to mitigate the damage from negative publicity related to a data breach, the cost of fixing systems, and the costs caused by downtime. CLIC can even cover extortion costs.
Does CLIC Eliminate Your Responsibilities?
Even if you have cyber liability insurance cover, your organization still has a responsibility to act in a professional manner. That means carrying out the usual risk assessment and mitigation processes. However, CLIC has a vital role to play at the mitigation stage.
Does CLIC Replace Risk Mitigation?
This is a common misunderstanding. Whether using IT consulting in Milwaukee or keeping the process fully in-house, your risk mitigation strategies offer a range of options. Once you have identified threats and risks, there are different ways to mitigate risk. These can include investment in hardening of systems, developing greater redundancy, and enhanced access control. The transfer of risk is another option.
Transfer of Risk vs. Legal Obligations
The fundamental principle of insurance is the transfer of risk. In other words, you don’t want to shoulder the burden of risk, so you pay someone else to do so on your behalf. You have car insurance partly because it is legally mandated and partly because if your car is written off or stolen, you don’t want to lose that investment.
With CLIC, you’re paying an insurance company to transfer your risk of liability to them. But don’t forget, you’re not talking about just the potential financial costs. When it comes to handling personal data, there are considerable legal obligations. You could face criminal charges over IT systems breaches. Furthermore, even with a CLIC policy to pay the costs of a PR campaign, aimed at reducing the damage of negative publicity, it can be difficult to salvage a brand that has lost the confidence of the public or an industry.
This is a Difficult Task
Yes, it certainly can sound like an overwhelming challenge. That’s why it is so important to partner with an IT consulting firm in Milwaukee to guarantee your cybersecurity is as solid as possible and your risks have been mitigated to the maximum realistic extent. Risetech Partners, can help you get to grips with this challenge. Contact us now for more information.